Another reason for celebration for patriotic Indians. The CAD ( Current Account Deficit) has come at 6.7 which is worse than expected. While this is not unexpected for most of the real economists, economists such as Rangarajan and Montek Singh Ahluwalai have expressed surprise. These so called experts have been predicting bottoming out, peaking out things for the past 2 years without any data to substantiate their theory. Meanwhile situation has become bad to worse.
For the past one month, even FII inflows are reducing. My expectations are ( These can happen and the probability I assign is 60 - 90%
1. Crude is gonna to go up ( Korea situation escalating which is also evident from chart patterns of crude)
2. FII outflows will start from Indian markets ( Even reduced inflows will cause mayhem here given the CAD)
3. Having received a left hook in February, car makers are looking to get right kick for March. This would be jolt for them. No need to talk about April which is traditionally dull month for auto sales.
4. US dollar index is going up which will accelerate nifty fall.
Saturday, March 30, 2013
Thursday, March 28, 2013
You read it first here - great Indian bank crisis
If the indications are true and if my assumptions hold good, we are in for our worst nightmarish scenario with Indian Banking system.
For the past few days(rather weeks) the news we read about Indian banks are not at all good. Most of the banks in spite of reduction in repo rate. There are serious mismatches in the ALM books which is not surprising given the fact that the bank chiefs are trying and fighting over one another to keep the Real Estate Broker community happy. Instead of moving and make things happen, almost all the Indian bankers are expecting divine intervention to continue to real estate bull run. But sadly, the story from the ground level is very pathetic.
1. http://www.business-standard.com/article/finance/banks-stare-at-mtm-losses-as-bond-yields-surge-113032700090_1.html
2. http://economictimes.indiatimes.com/opinion/guest-writer/indian-banks-caught-in-liquidity-squeeze-or-is-it-a-liquidity-trap/articleshow/19230219.cms
The very fact that the tumbling car sales caught these people unaware shows it all. I see this is not an one off incident and we are going to see many more. In my opinion it is only a trailer shown to us. The main picture is yet to begin.
You can extract the rate cut from RBI by hook or crook, but the real economy may not oblige you which is evident from the fact that there are mismatches in ALM and some banks had to raise interest rates.
For the past few days(rather weeks) the news we read about Indian banks are not at all good. Most of the banks in spite of reduction in repo rate. There are serious mismatches in the ALM books which is not surprising given the fact that the bank chiefs are trying and fighting over one another to keep the Real Estate Broker community happy. Instead of moving and make things happen, almost all the Indian bankers are expecting divine intervention to continue to real estate bull run. But sadly, the story from the ground level is very pathetic.
1. http://www.business-standard.com/article/finance/banks-stare-at-mtm-losses-as-bond-yields-surge-113032700090_1.html
2. http://economictimes.indiatimes.com/opinion/guest-writer/indian-banks-caught-in-liquidity-squeeze-or-is-it-a-liquidity-trap/articleshow/19230219.cms
The very fact that the tumbling car sales caught these people unaware shows it all. I see this is not an one off incident and we are going to see many more. In my opinion it is only a trailer shown to us. The main picture is yet to begin.
You can extract the rate cut from RBI by hook or crook, but the real economy may not oblige you which is evident from the fact that there are mismatches in ALM and some banks had to raise interest rates.
Sunday, March 24, 2013
Shame on you bankers....
For the past few weeks there is this talk about high cost deposits wrecking havoc in the psu banks. As expected sbi chief also shedding crocodile tears about his inability to pass rate cut benefits due to difficulties in deposit mobilisation.
As a mangoman i wonder what is the problem? If your deposit interest rate is not attractive enough obviously you have to raise interest rate. You dont want to do that for the reasons best known to you.
If bankers want to help real estate brokers at the cost of other sections then that is perfect receipe for disaster.
You can extract rate cut from rbi by coaxing and dancing with finance minister,but can never change economic rules.
Wednesday, March 20, 2013
Like government like corporates
Govt of India challenged rating agencies inspite of knowing the mistake is on their part. Similarly the corporates also started challenging rating agencies.
Today HDIL ( A real estate broker) challenged a rating agency inspite of verge to bankruptcy. What a comedy!!!
This can happen only in India.
Today HDIL ( A real estate broker) challenged a rating agency inspite of verge to bankruptcy. What a comedy!!!
This can happen only in India.
What administrative problems?
Economic experts talk about administrative problems for the slow down of the economy. They say Project approvals delay blah blah blah. This is nonsense I would say. I do not see this as a problem. The approvals and red tapism is in the country for several years. It was there during the high growth phase 2003-2010 etc.
The real problem is
1. Real Problem is Real Estate
2. The 'so called' appreciation myth makes all people to think the only viable business in the country is real estate
3. The lure of 50% or 100% margin attracts people and already many companies and individuals are heavily invested and money is stuck there.
4. Unless we (Government and Banking System) acknowledge that openly, there is no decent solution.
5. Ofcourse, Ugly solution is there which will unfold on its own.
Other than this, if somebody talks about project approvals etc, I dont have slightest of respect for him.
The real problem is
1. Real Problem is Real Estate
2. The 'so called' appreciation myth makes all people to think the only viable business in the country is real estate
3. The lure of 50% or 100% margin attracts people and already many companies and individuals are heavily invested and money is stuck there.
4. Unless we (Government and Banking System) acknowledge that openly, there is no decent solution.
5. Ofcourse, Ugly solution is there which will unfold on its own.
Other than this, if somebody talks about project approvals etc, I dont have slightest of respect for him.
Tuesday, March 19, 2013
Well done Subbarao
As expected RBI bank satisfied the beggars with little money. But what I like about Dr.Subbarao is that he categorically said that the beggars should not come with begging bowls for every monetary policy.
The 'ready to sell wife for a rate cut' lobby is less vocal nowadays and in fact they are nowhere to be seen this evening apart from usual murmur.
Equity markets does not take this kindly and I think there will be some real correction hereafter. Some interesting possibilities.
News
*****
As promised SBI passed the benefit by reducing the base rate by 0.00000001%. That too for car loan and housing loan which is very important for the nation building.
PMEAC chairman while welcoming RBI move, hopes as usual that the worst is behind that and he expects RBI to cut rates at much faster rate. Please remember he is telling this for 'n'th time.
The 'ready to sell wife for a rate cut' lobby is less vocal nowadays and in fact they are nowhere to be seen this evening apart from usual murmur.
Equity markets does not take this kindly and I think there will be some real correction hereafter. Some interesting possibilities.
News
*****
As promised SBI passed the benefit by reducing the base rate by 0.00000001%. That too for car loan and housing loan which is very important for the nation building.
PMEAC chairman while welcoming RBI move, hopes as usual that the worst is behind that and he expects RBI to cut rates at much faster rate. Please remember he is telling this for 'n'th time.
Indian Intelligence
Govt/corporate mafia/media brokers all did their bit to extract rate cut from RBI. I feel really pity for RBI governor.It would be very difficult to withstand the onslaught.
Now it is over to RBI. As I said there would be a rate cut. But I think..
1. Why banks are not raising deposit interest rates if they have liquidity issues
2. If people are so rich to make down payment for cars and houses in terms of lakhs, why they wont pay high interest rates for loans?
Banana republic is going wrong way.
Now it is over to RBI. As I said there would be a rate cut. But I think..
1. Why banks are not raising deposit interest rates if they have liquidity issues
2. If people are so rich to make down payment for cars and houses in terms of lakhs, why they wont pay high interest rates for loans?
Banana republic is going wrong way.
Saturday, March 16, 2013
Monetary Review 2017 and more.....
These are the probable scene which will be witnessed in 2017 Monetary Review
RBI has reduced the CRR further and the CRR now stands at -3%. That means RBI will give an extra 3% of the banks total deposits to all the banks to overcome the liquidity issue.
SBI chairman Pramod Chapri so upset about RBI with the minus 3% CRR. He argues RBI should give unlimited money to the banks without any interest cost and the CRR itself is a idiotic banking practice followed centuries ago.
Repo Rate is reduced further and now stands at -4%. This means mango men ( You and me) have to pay 4% interest to keep your money in the bank deposit.
FICCI President Podi Godrej reportedly unhappy with RBI, that the repo rate is reduced only up to 4%. He wondered how industry will grow if the repo rate is -4. He wanted RBI to reduce the rates further.
Karthi Chidambaram ( he would become finance minister by then) expects RBI governor Ramarao to act responsibly to reduce rates further to -10%, so that poor Kumbani's and Jehindra's can eat atleast a square meal per day.
In a separate news, the CPI inflation touches 23% and the WPI inflation is at 12%. Taking note on this inflation figure PMEAC chairman sundarrajan says the WPI decreases by 0.00002% which actually gives room to RBI to cut the rates further. Further he noted that the price of jet engine reduces by 100%, which is what we need to look as a sign of cooling inflation.
Planning commission deputy Chamcha singh puts blame of rural people. He says rural people has become more arrogant these days and started eating decent food for 3 times per day which puts more pressure on the inflation. He also expressed dismay about the fact that poor people started drinking coffee everyday. He also says government is taking effective steps to arrest this trend.
Meanwhile real estate continues to thrive and the price of a single bedroom flat is 10 crore even though 100000 crores of apartments still vacant in the country.
RBI has reduced the CRR further and the CRR now stands at -3%. That means RBI will give an extra 3% of the banks total deposits to all the banks to overcome the liquidity issue.
SBI chairman Pramod Chapri so upset about RBI with the minus 3% CRR. He argues RBI should give unlimited money to the banks without any interest cost and the CRR itself is a idiotic banking practice followed centuries ago.
Repo Rate is reduced further and now stands at -4%. This means mango men ( You and me) have to pay 4% interest to keep your money in the bank deposit.
FICCI President Podi Godrej reportedly unhappy with RBI, that the repo rate is reduced only up to 4%. He wondered how industry will grow if the repo rate is -4. He wanted RBI to reduce the rates further.
Karthi Chidambaram ( he would become finance minister by then) expects RBI governor Ramarao to act responsibly to reduce rates further to -10%, so that poor Kumbani's and Jehindra's can eat atleast a square meal per day.
In a separate news, the CPI inflation touches 23% and the WPI inflation is at 12%. Taking note on this inflation figure PMEAC chairman sundarrajan says the WPI decreases by 0.00002% which actually gives room to RBI to cut the rates further. Further he noted that the price of jet engine reduces by 100%, which is what we need to look as a sign of cooling inflation.
Planning commission deputy Chamcha singh puts blame of rural people. He says rural people has become more arrogant these days and started eating decent food for 3 times per day which puts more pressure on the inflation. He also expressed dismay about the fact that poor people started drinking coffee everyday. He also says government is taking effective steps to arrest this trend.
Meanwhile real estate continues to thrive and the price of a single bedroom flat is 10 crore even though 100000 crores of apartments still vacant in the country.
Friday, March 15, 2013
Comedy by Chidambaram and some real estate news
The way Mr.P.Chidambaram replied to the reporters made me to think that Chidambaram has given clean chit to the bankers based on their reply :)
It is a shame that the finance minister is jumping the gun and giving clean chit to the open / brazen act of cheat ing by the Indian Private banks, which came out by the sting operation. Unfortunately nobody in this country feels that they are committing frauds. Fraud and cheating become day to day activity and nobody is bothered about these things nowadays. The skin has become so thick. In fact if you live your life without doing such acts, our society will call you as 'Bakra' or 'Joker'.
Also I would like to write about Real Estate a bit today.We do not have a reliable indicator to measure the sale of new homes or registrations of homes. But I am sure similarly to car sales, home sales are also tumbling. Now it is the question of who comes out first with the distress sales or who reports the distress sales. Government is having a huge battle at hand and they no longer able to support the brokers. Broker community including Godrej are unusually silent. Is this silent before the bust?? we dont know. We love to see brokers to go bust soon.
Our media houses are dependent on brokers for advertisement income. In fact times group is doing real estate business so do not expect to see any such news in Times group newspapers such as times of India or economic times. I trust Indian Express and Hindu for that matter.
One of my friend is trying to sell a 2 BHK house in Bellary for 27 Lakhs. He is not getting any offers which on normal boom period would fetch easily 35 lakhs within a week of advertising. This shows the market situation. But we need more evidence.
There are indications that the hot money is beginning to go out of India. I am waiting to see some indications. I will share with you soon.
Cobrapost - It does not surprise me :(
Employees of Indian private banks
HDFC
ICICI
AXIS
are caught red-handed agreeing to convert black money into white money. Does it surprises anybody? My answer is big NO.
The bank employees are just puppets. They inherit this character from their bosses. Their bosses come on TV daily and beg/pressurize the RBI for rate cut without a slightest regard for the common man who is affected by the inflation. By doing so, they say what is their priority is as their priority is year on year fat bonus in addition to pay check, 30-40% profit growth QoQ whichever way it comes etc.
They simply do not care about the ethics or economy. Do you think they are really serious about KYC etc. The public sector bank chiefs are far better in this count . A public sector bank employee will worry because there is a chance that he may be caught later .but I do not have any respect for SBI chief. See elsewhere in this blog about my views on SBI Chief and his circuses to extract rate cut from RBI.
It is worth to be noted that KV Kamath after spoiling ICICI bank is out there to spoil Infosys. Infosys job is half done and way to go Mr.K.V.Kamath.
HDFC
ICICI
AXIS
are caught red-handed agreeing to convert black money into white money. Does it surprises anybody? My answer is big NO.
The bank employees are just puppets. They inherit this character from their bosses. Their bosses come on TV daily and beg/pressurize the RBI for rate cut without a slightest regard for the common man who is affected by the inflation. By doing so, they say what is their priority is as their priority is year on year fat bonus in addition to pay check, 30-40% profit growth QoQ whichever way it comes etc.
They simply do not care about the ethics or economy. Do you think they are really serious about KYC etc. The public sector bank chiefs are far better in this count . A public sector bank employee will worry because there is a chance that he may be caught later .but I do not have any respect for SBI chief. See elsewhere in this blog about my views on SBI Chief and his circuses to extract rate cut from RBI.
It is worth to be noted that KV Kamath after spoiling ICICI bank is out there to spoil Infosys. Infosys job is half done and way to go Mr.K.V.Kamath.
Thursday, March 14, 2013
Rate cut is a given this month
WPI is expected to reduce further by few basis points.
On this strength and also by quoting the budget fiscal plan Subbu may give in for atleast 0.25 basis point repo rate cut. CRR also may be cut for liquidity issues.
I need to see the rate cut, so that the country lands into bigger mess on external front.
This is how it should and will happen
On this strength and also by quoting the budget fiscal plan Subbu may give in for atleast 0.25 basis point repo rate cut. CRR also may be cut for liquidity issues.
I need to see the rate cut, so that the country lands into bigger mess on external front.
This is how it should and will happen
Account transfer divestment
Nowhere in the world you will see the novel divestment which is happening in India. We impotent stake holders of LIC does not have the backbone to question the day light robbery enacted by the government.
Yesterday LIC bought 46% of RCF shares which made available for sale. If this is how, we make our divestments, then why a process? just directly make the accounting entry which can be done by a LDC ( lower division clerk) in 5 minutes..why to have a process ?
What a joke?
Yesterday LIC bought 46% of RCF shares which made available for sale. If this is how, we make our divestments, then why a process? just directly make the accounting entry which can be done by a LDC ( lower division clerk) in 5 minutes..why to have a process ?
What a joke?
Wednesday, March 13, 2013
Any hope for patriots this month?
FII bought huge puts this month. FII net buying coupled with increase in open interest shows it may be genuine put buying. If this is what I think, they market may tank this month itself and that is the much needed sentiment crasher for this mad country to come to ground. Let us hope and pray the god for a huge crash in share markets and then later on REAL ESTATE.
I have written my points in most of the blog posts. Scroll down and read all the blogs. My point is most of the ills we face now are due to REAL ESTATE business. Crony capitalists, idiot politicians and greedy industrialists caused all this mess and situation has reached a stage where in no business is ready to do a business where the margin is less than 40%. Everybody started thinking that investing in real estate for 6 months would give 100% return and hence all other business activities are stopped almost. Even if there are any, the expectations are huge.
Only Ratan Tata did not come on TV and begged RBI for a rate cut. All the other greedy industrialists come on TV and put pressure on RBI and Government to fill their coffers. RBI forgot their and played along with this idiots and now the country economy is total mess. For people who are still could not understand, let me tell you..you have not seen the bust period and have only seen the boom period.
Now Government suddenly woke up and asking the foreign compaines and FII to pay tax for all the legal and illegal transactions. Nothing wrong. But why suddenly? So it goes on to say that, if there is not problem for government they wont implement law and collect taxes and if something happens then only we ask the foreigners to pay taxes. What a joke? I dont have slightest of respect to Manmohan singh, Chidambaram , Ahluwalia etc.
It is a shame that government is selling national assets in discounted price to the foreigners. Strange is that nobody talk against this act. Now people are more worried that their real estate investments should not go down. What a pathetic situation? This country to destined to see a slump and will happen very soon.
Subbarao to some extent is Ok. Initially he played along with government and industrials and later on understood his mistakes. But it is too late.
I have written my points in most of the blog posts. Scroll down and read all the blogs. My point is most of the ills we face now are due to REAL ESTATE business. Crony capitalists, idiot politicians and greedy industrialists caused all this mess and situation has reached a stage where in no business is ready to do a business where the margin is less than 40%. Everybody started thinking that investing in real estate for 6 months would give 100% return and hence all other business activities are stopped almost. Even if there are any, the expectations are huge.
Only Ratan Tata did not come on TV and begged RBI for a rate cut. All the other greedy industrialists come on TV and put pressure on RBI and Government to fill their coffers. RBI forgot their and played along with this idiots and now the country economy is total mess. For people who are still could not understand, let me tell you..you have not seen the bust period and have only seen the boom period.
Now Government suddenly woke up and asking the foreign compaines and FII to pay tax for all the legal and illegal transactions. Nothing wrong. But why suddenly? So it goes on to say that, if there is not problem for government they wont implement law and collect taxes and if something happens then only we ask the foreigners to pay taxes. What a joke? I dont have slightest of respect to Manmohan singh, Chidambaram , Ahluwalia etc.
It is a shame that government is selling national assets in discounted price to the foreigners. Strange is that nobody talk against this act. Now people are more worried that their real estate investments should not go down. What a pathetic situation? This country to destined to see a slump and will happen very soon.
Subbarao to some extent is Ok. Initially he played along with government and industrials and later on understood his mistakes. But it is too late.
Tuesday, March 12, 2013
Car Sales Busssssshhhhhhh!!!!!
The car sales figure for February 2013 comes in and it gives joy to all the patriotic Indians. The car sales plummeted to a 25% fall compared with last year. As usual 'ready to sell wife for a rate cut' gang started talking about rate cut and these idiots are talking about our economy being bottoming out. I want to ask these idiots one simple question...If the economy is already bottomed out, why the hell you are shamelessly begging for a rate cut from RBI, when the common man is suffering from Inflation?
I know, they cannot answer it.
Get ready for rocky times in share market.
Get ready for bad news on real estate front.
The bitter medicine is being shoved into the throat of government. They have to gulp it now. Spitting out is not an option.
Start music.
I know, they cannot answer it.
Get ready for rocky times in share market.
Get ready for bad news on real estate front.
The bitter medicine is being shoved into the throat of government. They have to gulp it now. Spitting out is not an option.
Start music.
Sunday, March 3, 2013
Budget flaps
People who follow Indian economy closely would vouch that the budget announced by Chidambaram is hopeless. But one should understand he also cannot do anything more. The damage is done already.
He knew Real Estate is the root cause but his hands are tied as many of his colleagues and many corporates and even big banks are in neck deep shit. Now a catastrophe cannot be avoided. I feel sorry for the country but it is necessary. Think of it like a surgery.Markets understood it and promptly tanked. Next in line to get its ass whipped is Real Estate. I would like to see some banks and real estate sharks collapse soon.
Enough about my emotions. Let us analyse the budget.
1. His only aim was to show the fiscal deficit number to 4.8% to avoid the rating downgrade. He has done it. But how? He has under provided some subsidy numbers in Oil. But I also agree, if crude falls he will be saved. But do you think oil prices will fall? I am not sure. US will not allow the prices to fall because they found huge oil reserves in their country and the middle east countries also a cartel. So I am not sure crude will come down and save Mr. P. Chidambaram.
2. It seems he has under provided for fertilizer subsidy also.
3. He has assumed huge income from divestment. This may not work out as stock market sentiment is not going to be that good to sell the shares.
4. Spectrum price assumptions also will go wrong as our corporates dont want to pay more money to spectrum.
5. He assumed robust tax income ( both direct and indirect) for next year to bridge the gaps. Unfortunately our growth nosedived from past few months and remember the Q3 of current month GDP is just 4.5. Just extrapolate and I will not be surprised to see sub 3% growth for next year. Trust me. This will happen. Car sales nosedived. You will not believe the real estate figures if they originally report the figures. Any country which only focus on saving real estate brokers ass is doomed to fall.
To understand the above points, we need not have studied in Harvard. We know the knowledge / intelligent level of harvard educated guys already :)
Some analysts praised his budget only because he did not announce any social welfare schemes. But that is not enough.
I am not only complaining. I have the solution. It is a bitter medicine. Eat on your own. At least you will satisfy your ego. If you are force feed, you will look like an idiot in world arena. But sadly that is what going to happen.
He knew Real Estate is the root cause but his hands are tied as many of his colleagues and many corporates and even big banks are in neck deep shit. Now a catastrophe cannot be avoided. I feel sorry for the country but it is necessary. Think of it like a surgery.Markets understood it and promptly tanked. Next in line to get its ass whipped is Real Estate. I would like to see some banks and real estate sharks collapse soon.
Enough about my emotions. Let us analyse the budget.
1. His only aim was to show the fiscal deficit number to 4.8% to avoid the rating downgrade. He has done it. But how? He has under provided some subsidy numbers in Oil. But I also agree, if crude falls he will be saved. But do you think oil prices will fall? I am not sure. US will not allow the prices to fall because they found huge oil reserves in their country and the middle east countries also a cartel. So I am not sure crude will come down and save Mr. P. Chidambaram.
2. It seems he has under provided for fertilizer subsidy also.
3. He has assumed huge income from divestment. This may not work out as stock market sentiment is not going to be that good to sell the shares.
4. Spectrum price assumptions also will go wrong as our corporates dont want to pay more money to spectrum.
5. He assumed robust tax income ( both direct and indirect) for next year to bridge the gaps. Unfortunately our growth nosedived from past few months and remember the Q3 of current month GDP is just 4.5. Just extrapolate and I will not be surprised to see sub 3% growth for next year. Trust me. This will happen. Car sales nosedived. You will not believe the real estate figures if they originally report the figures. Any country which only focus on saving real estate brokers ass is doomed to fall.
To understand the above points, we need not have studied in Harvard. We know the knowledge / intelligent level of harvard educated guys already :)
Some analysts praised his budget only because he did not announce any social welfare schemes. But that is not enough.
I am not only complaining. I have the solution. It is a bitter medicine. Eat on your own. At least you will satisfy your ego. If you are force feed, you will look like an idiot in world arena. But sadly that is what going to happen.
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